Recently, Deutsche Bank held its DB AutoTech Conference, which included talks with Tesla’s (TSLA) head of Investor Relations. Following the 2-day meetings, firm analyst Emmanuel Rosner believes that over the mid-term, Tesla’s “impressive trajectory for its battery technology, capacity and especially cost will continue to accelerate the world’s shift to electric vehicles and extend Tesla’s lead considerably.”
One of Rosner’s main takeaways from the conversations concerns Tesla’s cost advantage. The analyst thinks that possibly the “most important metric” in an EV maker’s P&L (profit and loss), is average COGS (cost of goods sold) per vehicle.
Tesla has done good work on this front. In 3Q18, its average cost per vehicle stood at $54,000 and 3 years later in 3Q21 this dropped to $36,000 per vehicle, amounting to a COGS reduction of $18,000 over the period. Hardly any of this drop has been due to lower cost of battery cells with the Price/Kwh “broadly stable” during this time.
Rosner counts “design improvements, more efficient factories, production ramp at full speed, better material sourcing, localized supply chain and labor hour reductions” as reasons why the cost came down. “All this work hasn’t even been started by EV competitors,” the analyst added.
Talking about the competition, 2021 has seen a fundamental shift in the way consumers view EVs. The result of which has been a “large gap between supply and demand.” The backlog for Tesla’s products, for example, is now between 7-14 months.
In the race for EV dominance, Rosner sees those who have enough capacity and can “secure enough supply to produce vehicles as fast as possible and offer them at the best cost,” as the likely winners, and Tesla feels it has a “considerable lead” on this front.
Rosner does not put up an argument with this statement, saying Tesla’s competitive advantage is due to its efforts to “secure supply, vertically integrate, and reduce costs.” Not only does the company source around 27% of all cells in the auto industry, it also designs a large amount of its own semiconductors, including chips utilized in power electronics.
To this end, Rosner maintained a Buy rating on TSLA shares along with a $1,000 price target. (To watch Rosner’s track record, click here)
Over the past 3 months, 26 analysts have reviewed Tesla’s prospects, of which 13 say Buy, 7 advise to Hold and 6 implore to Sell, all coalescing to a Moderate Buy consensus rating. The forecast calls for modest upside of 3%, given the average price target currently stands at $985.64. (See TSLA stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Tesla (TSLA) CEO Elon Musk tweeted on Tuesday that the electric carmaker would accept the cryptocurrency Dogecoin as payment for certain merchandise purchases on a trial basis. He tweeted, "Tesla will make some merch buyable with Doge & see how it goes.”
Following the tweet, Dogecoin jumped over 30%, while shares of Tesla were trading more than 2% lower in the pre-market trading session at the time of writing.
Merchandise sold by Tesla includes apparel, belt buckles, mini models of its vehicles, quad bikes 'Cyberquad' for kids, and the 'Cyberwhistle'.
Musk, a frequent supporter of the Doge cryptocurrency, previously accepted Bitcoin for vehicle purchases. This, however, was recently stopped due to certain environmental concerns. (See Tesla stock charts on TipRanks)
Analyst RecommendationsRecently, RBC Capital analyst Joseph Spak maintained a Hold rating on Tesla and lifted the price target to $950 (1.7% downside potential) from $800.
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 13 Buys, 6 Holds, and 6 Sells. The average Tesla price target of $982.96 implies 1.71% upside potential. Shares have gained 51% over the past year.
Website TrafficTipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Tesla’s performance. According to the tool, the Tesla website recorded a 1.2% increase in global visits in November compared to the same period last year. In contrast, a quarter-to-date comparison showed a decline of 6.43% compared to Q4 2020, while year-to-date website traffic growth stands at 1.67%.
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